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February 9, 2009

At TD Ameritrade Conference, a Feisty and Surprisingly Upbeat Crowd

Attendees applaud Bradley, while Rove draws fire and support

No one can say that advisors who custody their clients' assets with TD Ameritrade Institutional don't feel comfortable expressing their feelings--pro and con--at TD Ameritrade national conferences. In Las Vegas in the first week of February, some 900 advisors joined with 400 other attendees (including 150 TD employees) to network with one another, learn about the custodian's new offerings in technology and investing vehicles, and to engage with A-list speakers ranging from T. Boone Pickens to Karl Rove and Gen. Wesley Clark. While individual advisors admitted to suffering revenue declines over the past year and to feeling frustrated with the markets and the economy, those same advisors appeared to feel that they were more interested in preparing for a rosier future than to commiserating on the dour present.

The mood was captured accurately by TD Ameritrade CEO Fred Tomczyk, who assumed that position from Joe Moglia last October, and who in his welcoming address admitted that "I've seen difficult markets, you've seen difficult markets, but no one's seen markets like this." However, Tomczyk noted that TD Ameritrade had record earnings of $2.33/share in FY 2008, that it has a strong balance sheet and cash position--$1.3 billion in cash, debt of $1.4 billion, and $1.4 billion in EBITDA--and no U.S. real estate credit risk.

"We are committed to the RIA channel," he said, noting that it is "the fastest growing segment of the wealth management business," and because it is "our way of providing customized advice for the high net worth." As further evidence of its commitment to RIAs, Tomczyk announced new responsibilities for TD Ameritrade executive Brian Stimpfl, long the custodian's technology guru, who will now head an Advisor Advocacy and Industry Affairs Group. Stimpfl said the new position is further evidence that TD "wants to be a true partner, not just a custodian."

Tom Bradley, president of TD Ameritrade Institutional, prompted the first shout-out from the assembled advisors when he opened his remarks by listing the companies that were no longer in business due to the financial crisis. When he said the name "Merrill Lynch," a voice from the audience shouted "Who?" to much laughter from the assembled throng.

During the question and answer portion of the point-counterpoint session between General Clark and Bush Administration official and longtime Republican consultant Rove, an advisor questioned why Rove could complain about the policies of President Obama, and prompted applause when he recited a litany of what the advisor said were Bush-era missteps and deceptions. Soon the applause turned to shouts from some advisors pro and con the advisor who was speaking, while Rove and Clark's exchanges grew more heated.

In the final session of the conference on February 6 as Bradley spoke, an advisor shouted out from the audience "thanks for what you did with the Reserve Fund," referring to the $35 million commitment TD Ameritrade made last year to make up the shortfall experienced by TD advisors' clients who were invested in the Reserve Fund Primary Fund, which infamously broke the buck on its money market fund. In an interview, Bradley said he believed some of that $35 million had yet to be spent on backstopping the fund.